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June 29, 2005 at 08:00 PM
Lessons in Thrift
By Jack Bobo
In the early 1930s, when I was in grade school at P.S. 41 in New York City, a weekly ritual took place in our classes. Each week students had the opportunity to participate in a savings plan sponsored by a local savings bank. Our nickels and dimes were collected (there were not many quarters in those days) and placed in individual banks which were then forwarded to the bank and credited to our account. In retrospect, I am quite sure, given the smallness of the accounts, that this was not a moneymaker for the bank. Rather, it was part of the educational process regarding the importance of thrift. Banks in that era regarded the promotion of thrift as an important part of their mission and what better place to instill this philosophy than young children.
Still later, in the late 1930s when I was making more money carrying a paper route in Columbia, South Carolina, and working at an Army PX at Fort Jackson, I was introduced to another form of thrift. In those days, the post office sold Postal Savings Bonds and promoted the idea of a “bond a week” program. Dutifully, I bought a small bond, usually $2 to $5 each week. Because cashing in the bonds was not as handy as writing a check, my account grew steadily.
However, when I joined the Army Air Corps in June of 1941, I cashed in all my bonds except one for $1. I still have that bond despite the fact that the post office used to write me regularly to cash it in so it could get it off the books. I kept it as a reminder of the necessity for systematic savings no matter how tough the times were. Postal Savings Bonds gave way to War Bonds which could be purchased by payroll deduction plans, and now we have Treasury Bonds–all good lessons in thrift, if done systematically.
Still later, I entered the life insurance business in 1956 and was introduced to a new concept of systematic savings. I was raised in the business on the three-way security concept that money put into life insurance would benefit a person if he or she lived, died or quit. The objective was not so much to make a person rich but rather to avoid poverty. The hard times of the Great Depression were still vivid in my memory, and this form of systematic savings held great appeal to me and I bought into the idea wholeheartedly.
The idea that life insurance savings were “double duty dollars” and the prospect of being my own banker in times of need or opportunity were consistent with the lessons I learned at P.S. 41 and the post office. Over the years, the concept of systematic thrift has served me well. We have saved thousands in interest that might have been paid to lenders, and now enjoy a retirement free of debt and with adequate income.
